Mental wealth forecast

[00:00:06] Ian Hickie: I'm Professor Ian Hickie, I'm the co director of health and policy for the Brain and Mind Centre. We're going to talk about the multidisciplinary initiatives of the universities and one of the partnerships that we have, the Mental Wealth Initiative, which is led by two of our professors, Jo Occhipinti from the Brain and Mind Centre and John Buchanan from the Business School.

We had the pleasure earlier this year of convening a forum at the World Economic Forum in Davos, a forum on mental wealth in that area, particularly because the issue of how do you measure wealth, what really is wealth, and what is the collective wealth of all of us, is a central topic for developed nations and for developing nations.

And importantly, it was associated, from my point of view, with a great deal of anxiety. What is the future of all of us as people have developed economically? Have we developed socially? Have we developed collectively? What is the situation now?

But also on big issues, particularly the development of AI and of new technologies and what will be the ramifications of that for societies. Good to see a collective anxiety and a need to think about what really is the mental wealth of nations.

How is it measured? What determines it? What is the implications for social policy? For all of us, collectively, as a global community, but in each of the communities in which we live. So, it's great to have the discussion tonight led by Jo and by John, who've been working on these technical issues and the social policy implications.

Important to have our other guests, particularly Richard Denniss, who's the Executive Director of the Australia Institute, a group that kind of cares about what is the relationship between economic development, social policy choices, economic choices, as to comment on that. And we're going to have Elfy Scott, who's an award winning journalist and presenter, to convene that conversation.

[00:01:49] Elfy Scott: Hello everybody, I will just do a quick introduction and let you know that Jo-An Occhipinti will be presenting now, followed by John Buchanan.

[00:01:56] Jo-An Occhipinti: Thank you and good evening, esteemed colleagues, ladies and gentlemen. Thank you for joining us for this pivotal discussion. I think most of us would agree that since the pandemic, there's really been a growing understanding of the potential impact of mental health on us all; silently impacting our families, our communities, our workplaces, our productivity, and our future.

Despite decades of research, statutory inquiries, system reforms, and action plans and significant investments by government, business, and philanthropy, rates of psychological distress and mental disorder are not decreasing. In fact, for young people, rates are increasing.

At the Brain and Mind Centre, we've been working over many years to understand how we can really turn these trends around. One of the most important insights from our systems modeling and simulation work has been that while strengthening mental health systems is crucial for providing quality and timely care, it simply isn't enough.

Because, and to use a bathtub for a simple analogy, the inflow of people with mental health issues is far exceeding the outflow or the mental health system's capacity to help people achieve recovery. So the level of distress and disorder across the population remains elevated. The way forward seems straightforward, we simply need to turn down the tap.

The problem is that research has pointed to a complex array of social factors contributing to that inflow. Things like domestic violence and social media and housing insecurity and adverse early life exposures and an erosion of our social cohesion and many many more that overwhelm policy makers.

But we at the Mental Wealth Initiative have been asking, what if these social determinants are merely symptoms that are distracting us from addressing a key root cause? What if the key to better social an d psychological health actually lies in fundamentally transforming the very foundation of our economy?

Let's take this lens to the issue of youth mental health. Economic policies can have unintended consequences that directly and indirectly affect youth mental health. For example, while industrial relations reforms implemented since the 1980s and 90s in advanced economies have improved business flexibility, they've also increased job insecurity, intensified work pressures, and reduced the financial security of households.

While deregulation of the financial sector has created a more competitive financial system, along with other economic policies, it has also seen household debt soar. These can have knock on effects of increasing parental stress, family conflict, disengagement, can increase the risk of drug and alcohol misuse and domestic violence, all of which significantly affect youth mental health.

Also, research has shown us that unemployment and underemployment are direct contributors to suicide rates. Yet, labor underutilization amongst young people has reached nearly 25%. Last year, 9 in 10 young Australians reported experiencing financial difficulties. 70 percent were struggling to find affordable housing, and 20 percent were experiencing food insecurity.

It is clear that young people today are facing vastly different structural pressures than previous generations, eroding their well being and resilience.

So how did we get here? What the last 60 years has shown us is just how powerful the rhetoric around a single metric can be in shaping our world.

Since the founding meeting of the OECD in December 1960, which firmly established economic growth as a foremost global objective, GDP has become entrenched as a top line indicator of a government's good management of their economies and welfare of their nations. Since then, GDP has been used to justify economic policy focused on the pursuit of greater and greater consumption, economic efficiency, and worker productivity to the point that our health, social political, and environmental systems are now showing significant signs fragility.

Economic policies has shaped a world where insecurity and anxiety about the future is taking hold. where scarcity inequality, high competition, and a focus on individualism is breeding self interest, distrust, fear, and eroding our sense of community, leaving us feeling isolated and disconnected.

Coupled with the existential uncertainties of generative AI driven job displacement and climate change, there is a growing sense of hopelessness amongst young people that their ambitions for the future will not be fulfilled, creating fertile ground for youth mental health issues to continue, which is outpacing the capacity of our treatment systems to respond.

We will not be able to effectively and sustainably address the youth mental health crisis until we understand that economic policy is unequivocally mental health policy. There is no instrument more powerful in changing the course of our nation's mental health trajectory, and the international community agrees.

In May this year, I had the privilege of being invited to attend the 77th World Health Assembly, where member states overwhelmingly endorsed a special resolution to recognize the inextricable link between economic policy and health, including mental health, and work to realign economic health with the well being of ecosystems, communities, and individuals.

I've also recently returned from New York, where the UN General Assembly adopted the Pact for the Future. Among its action items, the pact formally recognizes the inadequacies of GDP and calls for urgent development of measures of progress that better support sustainable development. These events mark a significant milestone in the global wellbeing economy movement.

Countries including Scotland, Wales, Iceland, New Zealand, Finland, Australia and others are leading efforts to measure prosperity beyond GDP. Specifically they are incorporating a broad range of indicators including educational attainment, health, income inequality and environmental sustainability In their National Frameworks. In Australia we have the Measuring what Matters framework.

While these wellbeing indicator dashboards importantly provide rich information on the various dimensions of population wellbeing, with upwards of 50 different indicators they fall short in offering a clear picture of overall progress in the way that GDP does.

As a result, GDP remains a privileged indicator used to justify policies that are eroding our well being and resilience. With investments to foster social and environmental well being, secondary objectives, if nations can afford it, and if it's politically convenient. This is a major barrier to achieving well being economies.

So how do we begin to overcome this barrier? Well, firstly, we propose integrating social production into our system of national accounts. Now, social production is the glue that holds society together. It includes activities such as volunteering, caregiving, ecological restoration, informal mentoring, civic participation, and unpaid contributions to the arts. Activities that contribute to strengthening the social fabric of communities.

Social production can give people a sense of belonging and purpose and connectedness that fosters their mental health. It supports our ability to be productive in the formal economy. It improves environmental well being. And it gives us surge capacity to respond effectively in times of crisis. In essence, social production makes nations more prosperous, more cohesive and more resilient.

For young people, supported engagement in socially productive activities can offer meaningful social roles and an opportunity to develop a positive self concept empathy, an outward looking sense of purpose, and community connectedness, which can improve their mental health and well being, their pro social behaviors, and their life satisfaction.

Social production is the missing part of the production equation. The fruit of human productivity that we currently do not value and insufficiently invest in. Combined with economic production, we call this the mental wealth of the nation. Because when we have environments that foster brain health, mental health, cognitive skills, and collective social and emotional well being, we contribute in positive ways. To the economy, and to society.

So measuring, monitoring, and regularly reporting on the value of social production and having it integrated into the national accounts rather than an aside, we hope will help catalyze cultural and political shift towards a more balanced view of national prosperity. This shift can foster a new narrative and open new doors to innovative solutions for rebuilding our social fabric.

Two ideas in particular that we think offer promise are firstly the social production wage, which offers a living wage in exchange for engagement in socially productive activities, and national time banks, which allow individuals to earn time credits by providing social production related activities to others; and then they can use the deposited time credits to access services they might need in the future. Both policy innovations offer promise in strengthening community cohesion, promoting inclusivity, contributing to tackling the loneliness epidemic, and enhancing social and economic prosperity, thereby creating positive environments for mental well being.

But these are just two ideas. There may be many, many more that we can propose as we start to engage with the idea of policies that foster the mental wealth of a nation.

In conclusion, we are where they were, at a pivotal moment in history that demands a new approach. The thinking and tools that guided us through the 20th century are simply not suited to the challenges and threats of the 21st century. But shifting the entrenched economic narrative and frameworks won't be easy and it won't be achieved by progressive economists alone.

We all have a critical role to play alongside economists in advocating for wellbeing, promoting policy and legislation in taking up new metrics and immobilizing communities for change.

We must push ourselves beyond our traditional boundaries to reshape economies that will foster health and well being for all. Thank you.

[00:12:42] John Buchanan: Thanks for that great introduction, Jo. I'm going to follow on from Jo's presentation to talk about the topic of mental well being and social connection at work.

Jo gave you a very good outline about what the mental well being idea is about, I'm going to tunnel down and give you some details on what it means for issues at work and in the labour market. So, what I want to quickly cover is where am I coming from, what are we finding, and how can we help improve things.

Where am I coming from? I'm the labour market guy. Jo's from the Brain and Mind Centre. Jo and Ian came over and saw me a couple of years ago and they said we've got this really interesting idea. Mental health is a really important issue, but we're not giving enough attention to building psychological strength on a collective basis. And I thought that's a really nice, simple idea. And they came to me as the labour market guy because workplaces are an important site where things are either strengthened or undermined. And what I want to share with you tonight are some of the really big facts that I think are worth reflecting on.

Jo's talked to you about the rising mental disorders for the young, but I want to draw to your attention some of the really killer facts that are coming out of the labour market at the moment. Jo talked about insecurity, she talked about young people, but if you look at the workers compensation systems, you've got to remember, Australia's done a fantastic job on work health and safety, right? But more, per capita, fewer people are being killed and injured at work today than ever. It's a huge success story that we don't talk about, except for mental disorders.

This is data from the New South Wales Treasury Managed Funds, and just look at the scale of that growth. That's total days off work from 2010 to 2021, basically coming virtually from nowhere to up to now 300, 000 days a year. That's teachers and nurses.

And remember, these aren't insecure people in insecure jobs, right? It's turning it around. It's not just the problems of people on the periphery of society. These are people who are actually in jobs where there's a labour shortage. This was confirmed also in the recent Royal Commission released on suicides in the armed forces and in DV8.

Armed forces, except for the natural hazard of the job. They're one of the most secure jobs you could have. Look at medical separations. Very similar period of time, right? From 2003 to 2010, around 600 a year. That's now up to 1800 a year. Astronomical growth. And most of that growth is in mental health.

 The bottom three colors are mental health related. So in 2017, mental health related departures were 55 percent of the armed forces, they're now 75%. So I'm showing these as paradoxical facts.

Jo's talked about the underlying insecurities that are part of the problem. When you get to the labour market, it's those even insecure jobs that are having problems. So what's driving that?

We think, and these are important data to reflect on, there has been a decline in social support at work. It's very hard to get data on social support at work, but the Bureau of Statistics collects really interesting information.

This is data on how much work, how many workers in Australia get any kind of training. The statistic you should really look at is this one here. In 2005, in any one year, 35. 9 percent of workers reported that they got work related training on the job. That's now down to 23%.

Alright, so what we've seen is, on the job training is a good proxy for the kind of support you get at the workplace.

But wait, there's more.

If you go to the Household Income Labor Dynamics of Australia, it's been tracking 15, 000 families and workers for over 21 years now. And this is just some basic data that was pulled out by the Black Dog Institute that's highly relevant.

And you'll see that there's a decline in control, people feeling in control of their working lives. So that's a sense of how much freedom do you have at work. That's in decline over two decades. And what about complexity on the job? That's been going up. So social support's been going down, complexity's been going up and control has been increasing.

But then the final one is work intensification. This is actually strain on the job. This is data that was pulled out by people at NATSEM at the University of Canberra. There's a direct correlation between work intensification, where work intensification's high, your mental health is comparatively lower. Significantly lower if you're a male.

So the really interesting question is, what do you do about it? Jo gave you some insights into this, and we've got an agenda which says you've got to look at this at three levels. At the national level, you've got to think about what's the metric for success, and that's a big game, right?

And we recognize that trying to change GDP is something that you should certainly go for, but you don't put all your eggs in that basket. We also think that you've got to think about getting practical tools that people can use day in, day out to track the kind of problems that I've identified in those earlier slides.

The third part of our research program is working with people at pivotal points in the labour market who can, by changing their practice, have knock on effects for changing other people's practice. And one of the groups we're working with there is the workers compensation systems, particularly iCare in New South Wales.

They are at the intersection of the labour market, the health system, and insurance. And if you can get a change there, that can have knock on effects into other parts of the economy. So I'm going to give you one worked example of what we've been doing with industry funds management.

That's the peak organisation for industry super schemes in this country. And you may or may not know, but Australia's superannuation system is one of the biggest sources of savings in the world. Because of this they have huge amounts of money to invest, and they are no longer just little minority shareholders.

They are often owning assets in their own right. And they're not speculative investors. When they invest, they invest for 20 to 30 years.

So they've got a problem. They recognize these are issues. How do you maintain what they're calling a socially sustainable workplace? And they've approached us and we're working with them to try and clarify how do you generate a socially sustainable workplace.

And they said they wanted metrics. And we said, well, hold on a minute. As typical academics, we said, maybe it's not that straightforward. You just don't dive straight into metrics. And I've been delighted to work with them. They're perfect partners. We said if you want to really get clarity, about getting a sustainable workplace, you've got to have an understanding of who's responsible for managing it.

That's actually quite difficult because when you look at the assets that the SuperRUN funds own, there are six different levels of management. And the way in which our accountability systems are structured, it's often hard to identify who within it is responsible for what.

So the first thing I'm going to do is clarify who's gotta be accountable. You've then gotta be asked, what are they accountable for? And this is where they own some ports, for example. But if you wanna understand what's going on in a port, say they will own that part of the overall value chain ecosystem. But what goes on in a port is shaped by the shipping lines, the exporters and importers owning the cargo, those who own the container parks, transport operators, stevedores.

So that's the second thing. You don't just have to know who and how, you don't have to get better coordination with management. You've got to have clarity about what it is you're tracking. Then you can elaborate on the data items.

This is the level of detail we're getting down to. So if you want to have a sustainable workplace, we've started to identify the data items that you need to track. This isn't just relevant to the industry super funds. We're also working with the Queensland Nurses Union.

They also have a very difficult issue in socially sustainable workplaces and this is where the projects are helping each other and clarifying the data items that you could go through.

So, basically as a research program, we as academics, not your typical academics. Jo and I have both worked outside the normal mainstream. For us, policy is a domain that needs its own research. You just don't go away and figure out what the problem is. Academics are really good at figuring out what the problem is. Figuring out what to do about it is another example of another problem in itself. And we spend a lot of our time researching the options.

 I've given you a little case study of what we're doing with the Superfunds and the Queensland Nurses Union. That's part of this research program. Understanding the problem, but also identifying ways forward. But I did want to finish with a note that we are also realistic. You can research a really good solution, but often people don't want to follow it.

As academics, we unpack critical paradoxes, which is what academics do, and we get quite excited by that. So even if no one implements any of our ideas, we've introduced some interesting ideas along the way. Thanks for giving me the time and I can elaborate on any of this in your questions.

[00:22:05] Elfy Scott: Thank you so much for that, John. That was brilliant. I would love to welcome, Jo, as well as Richard.

We do have a ridiculously impressive panel with us here. John as a labor market expert, Jo as an epidemiologist, and Richard as an economist. So, we're going to have a very interesting session.

John, I would love to start off by asking you, probably a very simple question here, what is the difference between mental health and mental wealth? Are you simply suggesting that we need to bolster our mental health resources?

[00:22:37] John Buchanan: No, that, that's a really good question, and look Ian and I went to DeVos earlier this year, and we had, we invited a panel of very many people from all over the world to participate, and I'm somebody who's had a lot of experience in organizing these panels.

I spent two days before the workshop having to explain that concept to the panelists.

[00:23:00] Elfy Scott: Sorry to make you do it again.

[00:23:01] John Buchanan: No, no, no, no, no, because often people think what we're talking about is mental health services at scale. Right? We showed you that data, that the mental disorders are going up.

Jo showed it for you for young people, I showed it for you for people even in secure jobs. The solution to that isn't to have more psychologists and psychiatrists. You saw the scale of the increases, I mean, I don't know if you look at Joe's numbers. They are astronomical.

There's something going on with young people, there's something really very sad going on with young people in terms of the mental distress they're going through. But, if we simply train more psychologists and more psychiatrists, we generative mechanisms that are creating the problem just simply get off the hook, and the driving force for us is how do you stop the problem at source?

And so, the key ideas we picked up from British, some British researchers, they basically said, as we look out to the future, in the past, success of the society has been determined by producing monetized material wealth, that's what GDP is. But they said, as we look out over the next 50 or 100 years, we're going to have to look at the mental dimension of life, and that's where we get that notion of mental wealth.

There's monetized material wealth. But the mental dimension is, as a society becomes more mature, is the domain through which we can flourish.

[00:24:23] Elfy Scott: Thank you for that. Richard, as an economist, do you acknowledge the shortfalls of GDP?

[00:24:30] Richard Denniss: Oh yeah, of course, and everyone does. Look, GDP's just a number. And John and I, and Jo were talking earlier, but I think non economists take GDP a lot more seriously than most economists.

No, it's just a number. And if you turn a number into your goal in life, whether that's your superannuation balance or the number of Facebook friends you have or GDP, you will stuff it up. It doesn't mean that the number can't tell you something interesting, but you can't ever turn, a simple number into a life goal for an individual or for a country.

I think what these guys are talking about is fascinating and I think we need to understand that, you know, GDP has always been flawed, and if you Google flaws with GDP, you'll find fantastic quotes from since its inception. To paraphrase the guys, and they were all guys who invented it, they said, please, please, please don't ever use this as an indicator of national progress, please, please don't do that.

[00:25:30] Elfy Scott: Is that the quote?

[00:25:31] Richard Denniss: No that's a paraphrase. But I'm just saying the people who invented it weren't stupid. The people who invented it were trying to figure out how to rebuild Europe post World War II, where literally all the infrastructure had been bombed to oblivion. And you know what, maximizing the rate at which you could build bricks and lay them was really important data to have in 1950 in Germany.

Alright, so for us to sit back in 2024 and go, Oh, it's a pretty silly indicator, it leaves a few things out, we know. All right, but our elected representatives and a whole bunch of people in my profession working on their behalf are very quick to say it's kind of the be all and end all. So just quickly, I mean, keep this in mind that in economics, when we've got something dumb to say, we usually say it in Latin, okay?

Because that means we can tell you how limited our analysis is, but you don't really understand it. And. In economics, we make a lot of claims, all other things being equal. Ceteris paribus, we say. Ceteris paribus.

All other things being equal. So, to be clear, if I said, John, all other things equal, would you like 10, 000 bucks?

[00:26:41] John Buchanan: Yes.

[00:26:41] Richard Denniss: Right. Good answer. Now, most people, why wouldn't you? But if I said, John, would you like 10, 000 bucks? But, along with the 10, 000, you don't get to spend any time with the people you love most for the next 10 years.

Would you take the 10, 000? Right? He wasn't wrong the first time he said it.

But if we say, look, all other things being equal, wouldn't you rather live in a society with a bigger GDP than a smaller one? Yeah, you should. You really should. But if the way we're growing GDP is ruining our lives, Ceteris isn't paribus anymore.

That's not Latin, by the way. All other things aren't equal. So it's just a simple trick. We're focusing on the bit we can measure, personal income or national income, we're focusing on that with laser like focus, and we're ignoring all this other stuff. And economists never said, ignore all that other stuff.

We never ever did. And you really shouldn't. But now we've got this bizarre situation that we believe we have to maximise GDP, and we're struggling with the irony that it's making us sad. We shouldn't do the things, don't take the 10, 000 bucks, don't take that extra 0. 1 percent economic growth if it's ruining the lives of your kids.

But these are subjective decisions that we have to make, and more information will help us make it, but those trade offs have always been there, but we've been trained to just look at the simple to measure stuff.

[00:28:09] Elfy Scott: Yeah, absolutely. Jo, you mentioned young people in your presentation, and you're focusing in on the mental health of young people. When we're talking about the contributions that certain groups make what sort of contributions are being missed by GDP?

[00:28:24] Jo-An Occhipinti: Yeah, so we have been making efforts at measuring social production to really understand who's doing what in terms of what we're not seeing in our macro measures.

And we measured Australia's social production based on the time use survey and what we found was that I think Australians were contributing 288 billion per year in terms of social production. I think that's about 14 percent of GDP. We did the same in the in the U. S., we worked with Harvard and the Reform for Resilience Commission, and Rice University's Baker Institute for Public Policy to develop or to estimate the U. S. social production, and it was around 2. 3 trillion dollars, which is about 9. GDP.

 What was interesting about those estimates is looking at the breakdown, as you were saying. And it's those people that are traditionally undervalued in the formal economy that are making the greatest contribution.

So the over 65s, the unemployed women young people were making a surprisingly large contribution than we anticipated. But what's important is not the absolute number, and these absolute numbers are at the moment flawed because we don't have a good data ecosystem to measure social production.

The time use surveys are really only providing us four of the eight categories that we consider to be social production. We do need to strengthen the data ecosystem so we get a full picture, but the absolute number is less important than the relative change over time.

That's why we're working with the OECD, who have data across 10 countries across several decades to try and estimate what's happened to social production over time, with a view to trying to encourage countries to measure social production moving forward so we can report it on a regular basis, quarterly, at the same time as they're releasing GDP figures, we can release social production figures and really change the discourse about what makes us a prosperous nation.

[00:30:24] Elfy Scott: John, why are we talking about mental wealth? Why is it more relevant than ever before?

[00:30:29] John Buchanan: Well, I'm not sure that it's more relevant. I think it's always been relevant. If you look at the kind of philosophical debates about what a meaningful life is, it's been about companionship and contemplation. They're like the really big ideas if you go back to Aristotle. And that's not monetized material wealth. If you're to live a worthwhile life, they're the issues that count. And that, I suppose that's what we're getting back with we're looking at the broader sense of companionship in a very broad sense.

So when you're talking about on the job training, which is what I was showing you that data on, that is a form of social support and companionship. The technical answer to your question is, the British Chief Scientist in 2004 said we've got to think about how do we flourish as a society into the coming decades.

350 of his closest friends as researchers got together and worked really hard to come up with this idea. They then put it out at the beginning of the GFC and the idea got lost. But I think what's happened, particularly with the rise of mental health challenges I think more people are asking, we just don't need services at scale, we need to take this issue of prevention more seriously.

So I think that's there if you like, the social determinants of why the issues emerge. But I do think, it's always been there. If you look at the debates in philosophy, if you look at what policy's been trying to do, there has been a respect for this stuff, it's just been not elevated as much as we're trying to elevate it now.

[00:31:53] Elfy Scott: Yeah right. And Richard, I mean watching Jo and John's presentations earlier, as an economist, How do you look at something like this and think about the practical policy frameworks that could implement something like this?

[00:32:07] Richard Denniss: Yeah, great question. I'll just take off on what John was saying on my way to answering that.

I mean, everyone knows GDP is a bit silly, right? We really do. So one thing GDP doesn't capture is, you've heard, household production, or volunteer work. The irony is if I go and pay someone 50 bucks to give me a massage, it counts in GDP.

But if John and I give each other the massage, it doesn't count. So if we've got healthy relationships where we can help each other out, it literally doesn't count. But economists know this. I can't stress this enough. What GDP captures are transactions. Not production, transactions.

So when there's production for which there's not a transaction when there's a back rub that didn't get cash for it, it's not that we think it didn't happen, it's just literally not included in the thing we call GDP.

So a lot of the economic growth that we've measured in the last 30 years is a direct consequence of the fact that, for example, a lot more women work now than used to, so often they, their household pays. for the production of services that they themselves used to produce.

A woman who used to stay at home and care for kids or husband full time, now works full time or part time, all the cooking and cleaning that she, I'm using gender stereotypes, used to do, didn't count when they did it at home, but now that they're getting paid to go to work, that counts in GDP, and all the services they buy count in GDP.

And we're like, wow, look at all that magic economic growth. But that production was already occurring. It just moved from the unmeasured section into the measured section because all we're measuring is the transactions. So there's some real challenges when we try to turn this stuff into our national accounts.

It's really what we're saying is how will we come up with arbitrary numbers to put on the value of things for which there aren't transactions. Yeah. I could go to a hairdresser and pay 50 bucks for this haircut. I'll give you a hint, I choose not to. I ought to do it myself so it doesn't count. But if, and some people here, not you, but the person sitting next to you, might spend 400 bucks on a haircut.

I think you're mad. But GDP doesn't think you're mad. GDP doesn't care at all. If you pay 400 bucks, guess what it's worth? 400 bucks. So when we're doing our GDP ness, we're okay with how weird some of your transactions are. We'll settle for any random number you're willing to pay.

And no one second guesses it. But the minute these guys come along and say, well I think we should put a value on volunteer work, you watch the argument about the value of it. But we never argue about the value of your haircut. We never argue about the value of anything you do. So, the really challenging part of bringing these non transaction production things into our system of transaction things, is coming up with values we can all agree on.

And it's really hard, but that doesn't mean we shouldn't do it. And, you know what, the dumbest number to use for some of this stuff is zero, right? So as long as, and this is Jo's point, as long as we're moving away from zero, that's good. And, go back to that great photo, here they are sitting around not inventing GDP, but agreeing, let's all obsess with GDP.

If that meeting took place today, it wouldn't get anywhere. When GDP was getting invented, when the OECD was agreeing to prioritize it, I promise you there was no consultation. I promise you there was no input from, no one knew what it was about. They weren't getting consensus on it.

Why this is so much harder is having done a pretty dumb thing for a long, long time, people are coming along going, Oh, maybe we should tweak it a bit.

Hang on. Let's get 8 billion people's thoughts on this. No, no, this is the actual intellectual problem. All right. And they didn't have to go through that when they were cooking this up at the beginning. No one cared. And then it just became a habit. Changing the habit is hard. It doesn't make the habit good.

[00:36:14] Jo-An Occhipinti: I'm a bit worried, John, because we published that paper in Nature Mental Health on what constitutes social production. We forgot to add backrubs.

[00:36:22] Richard Denniss: You're just not getting enough of them.

[00:36:25] John Buchanan: Can I just elaborate on Richard's point that it's not about what's valued and we're trying to bring in, we're also trying to note what's been destroyed, so that's why I put up the on the job training. And I've looked at this over many years.

We all heard about labour productivity, the miracle of labour productivity boosting in the 80s and 90s. We're still hearing about that, glory years of reform. And then people started running around and saying, we've got all these skill shortages.

Well, if you strip on the job training out of the system, you run out of experienced people who have been prepared to enter the profession. So What Jo and I are particularly interested in is making transparent what's going on. So if the reports had been around then, you could have said labor productivity has gone up, but you're actually destroying the capacity to move forward by stripping out the capacity to reproduce skill. And so it's getting that transparency is a big motivation.

[00:37:20] Elfy Scott: Such an important point.

We are running out of time, so we will head into the Q& A segment in just a moment. But Jo, I did want to ask you just another sort of practical question.

When you speak about the social production wage and national time banks, I think it's such a fascinating idea, but on a very practical level, like, what is going to be funding those kinds of systems?

[00:37:44] Jo-An Occhipinti: Yeah, that's a really good question. I think, There are any number of ideas, one idea I find quite compelling is Mariana Mazzucato in her book, The Entrepreneurial State, talks about governments taking an equity or a share of returns of their investments they make in research and innovation rather than just taking the risk while the markets reap the returns.

And she points to the public sector having contributed to key technologies in the iPhone like GPS, touchscreen display, Siri and that sort of thing. Also governments invest in life saving pharmaceuticals and green energy technologies and even improvements in baby formula she speaks about.

So if governments took a share of the profits made from those sorts of Innovations. Then they would be able to fund healthcare, education, social protection measures to improve financial security for people and then have more to invest in research and innovation, creating this very positive feedback loops.

That's just one idea, but there are new ways to think about how we design or structure an economy that could look after its people.

[00:38:55] John Buchanan: Can I give an example of the time banks too, like the German engineering industry has pioneered labour standards for many decades and they moved to the shorter work week this is in the late 80s, early 90s, and they actually had the idea of a time bank that if an establishment had excessive overtime, that was noted, and the workers would bank it up, and then they could take time off.

But then what they also did is they would just say, that would trigger a recruitment decision. So by tracking time, you then actually engaged in labor flows. So instead of then the workplace becoming dependent on a small group of people working big hours, they would share the hours around. So there's actually quite a bit of experience around in time banks.

Okay. associated with industrial relations arrangements and the like.

[00:39:42] Elfy Scott: Yeah, brilliant. Okay, we're going to open up for audience questions.

 I'll start with this quite spicy question. Why not? Would attempting to update the GDP model with a new proposed model that includes invisible female contributions spark an outburst from male driven policies and government? Richard?

[00:40:01] Richard Denniss: Yeah, this is my point. What we include in our key performance indicators for our countries really matter. Back when I was an academic in the 90s, you know, they started saying, let's count your publications. And then everyone just wrote short crappy papers. So they went okay, now let's look at the quality of the journal and now it's, oh, let's look at your best couple.

It's really hard to quantify what it is we want to achieve. So yeah, absolutely. If we were to say, look, these things are important, we're going to value them. Then some people that do some other things might feel miffed about that. This is my point, that the data's important, don't get me wrong, but the data actually reflects status, it reflects power, it reflects distribution, and saying we need more of this, almost by definition means we need less of that.

These aren't just intellectual conversations, these are, if the indicators are matter, things change because of them. So anyone that likes things the way they are should feel quite threatened by change.

[00:41:00] Elfy Scott: There you go. I believe we also have a question in the audience over here.

[00:41:05] Audience member: So I find it very interesting that the industry super funds which, as you say, are one of the largest sources of capital in the world have this kind of Orientation to the public good, presumably because they would capture so much of the benefit improvement in mental wealth, that being there and just to do so.

And I guess this is kind of the flip side of monopoly, right? When you've got a really, really, really big player, it benefits if the economy as a whole benefits. And I'm just very interested in the fact that they chose to fund this research and what that kind of dynamic plays in it.

[00:41:40] John Buchanan: Yeah. Look I think it's worth recognising there's a benefit in a sense of scale, where you've got, say a company that's owned by, a diffuse bunch of shareholders, they don't see anyone, any benefit for taking responsibility for on the job training. They want to get their share in, make as much money as they can get out.

But because super, the Australian super funds have said, well we've got to actually get a revenue stream over a very long period of time, and we've now got this responsibility, they can see that simply getting in and getting out quickly is not good. They want to have an asset that's worth something over time, and so the idea of social sustainability is just as important for them as it is for financial sustainability.

So you are right, it is a question of scale. But, I think it was Mark said that, you know, monopoly capital is actually a good thing. That you actually get an economy that gets big reserves and can make big investments and can make big breakthroughs. So yeah, there is, you're right, there is a definite connection between scale and this issue.

[00:42:40] Richard Denniss: There's an interesting bit of theory that you might want to look up called the universal shareholder theory. It's a fascinating thought experiment. This is a thought experiment. But Australia's super system is so big the thought experiment's getting close.

So imagine you had all the pension funds in Australia, let's just make Australia, what if they grew and merged and grew and merged such that you had one big super fund?

And what if everyone in Australia, and let's say everyone, but we mean every worker, was a member of that fund? Then there'd almost be no externality. So an external cost is a fundamental problem in economics where I make a decision that's good for me, but it's imposing costs on people who aren't involved in the decision.

But if I was the trustee of the one big super fund. An Australian super is you know, pretty big, and I own shares in everything, then if this company's ripping off this company, it's not helping me, but if I own or am significantly invested in all the companies, And all the workers work for the companies.

If I'm ripping off my workers in company A, I'm actually ripping off my members. Because if all the workers are members of a super, right. So the universal share ownership stuff's really conceptually challenging for traditional economics. Because rather than saying, but if there's billions of customers, everything's atomistic, well that world's gone.

We're far closer to the universal share ownership model. Where if, yeah, if you're an industry super fund with 300 billion dollars invested in every company in the ASX, then do you really want the boards of one company spending huge amounts of money in wars with another company? If you're representing a couple of million workers, if you're ripping off some of those workers so the company can make a profit so the return to the workers can be a bit bigger.

It all gets a bit weird, doesn't it? So, check out Universal Share Ownership.

[00:44:32] Elfy Scott: Thank you for that. I think we'll finish on this final question, which is, where do you see the role of people managers in impacting the mental health and wealth of an organisation? John, that's probably one for you.

[00:44:45] John Buchanan: Yes that's a, it's a really good question and That's why we have the three part research program. That's why we're working with the nurses. They've got nurse unit managers who've got to look after a shift, and they've got to look after the health and well being of their workforce and they've often got imperfect information systems so, yes yes, this is a tool that will make transparent what the problems are, and potentially give you leverage at a local level to argue the case for a better outcome.

But I suppose what we'd like to underline for our research program is that there's only limited space for you at a work site level to make a huge difference. You can make a difference, but it's circumscribed.

And you might remember I showed you that diagram of the layers of management and the value ecosystem to really shift the dial, you've got to engage with all the levels of management and engage with the entire ecosystem, which is why we're looking at those systemic changes with super, with workers compensation as a potential leverage point.

But then ultimately even that is constrained by the national setting, which is why we're interested in GDP. So, yes, you can make a difference, you know, a good HR manager is a lot better than a not good HR manager, but there are still significant constraints, and so the burden of our analysis is we want to give you something that is relevant, but we're not pretending that you can solve this at the level of the local worksite.

You can take the raw edge off a situation, but you can't really stop the big generative mechanisms

[00:46:19] Elfy Scott: Yeah, absolutely. Okay, well, I think we're actually running over time already, so would you mind please giving a round of applause to our wonderful panel, Richard, John, and Jo?

Thank you so much.

For links to any of the resources that we have touched on in today's talks, please visit the Sydney Ideas website. We hope to see you at future sessions.